Last year, researchers at Penn State University released a report predicting drilling for natural gas in Pennsylvania’s portion of the Marcellus Shale would have a huge economic impact: $13.5 billion and nearly 175,000 new jobs by 2020.

It’s what wasn’t in the highly cited document that concerned some people. Missing was a disclaimer saying the study was funded by the natural gas industry.

Now the school appears to be distancing itself from the report that has been championed by drilling advocates. A letter written in June by William Easterling, dean of the College of Earth and Mineral Sciences, said the authors of the report were required to disclose where they received funding and “should have been more circumspect.”

“We found flaws in the way that the report was written and presented to the public,” Easterling wrote to the Responsible Drilling Alliance, a Williamsport, Pa.-based group that had raised concerns about the potential conflict of interest. The scientific analysis, though, is still “sound” and “does not appear to have any significant flaws,” he wrote.

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The Penn State shield was on the cover and all 34 pages of the original report, which was released a year ago.

Then the researchers issued a revised version and retracted the original report, leaving the logo only on the cover. They also added a disclaimer confirming it was industry-funded and the opinions did not necessarily reflect those of Penn State. The report received funding from a Pennsylvania-based group of gas and energy companies called the Marcellus Shale Coalition, formerly known as the Marcellus Shale Committee.

A completely updated version of the report was issued in May, in which economic-impact estimates were tweaked, lowering the number of jobs created in 2009. However, it increased predictions in two key areas, estimating Pennsylvania will see $18.9 billion in added value by 2020 with nearly 212,000 new jobs.

The Pennsylvania Department of Labor and Industry, by comparison, estimated in April that drilling in the Marcellus Shale would produce 12,423 jobs by 2015.
Calls to the Marcellus Shale Coalition and Easterling were not returned.

The Responsible Drilling Alliance wrote a pair of letters to the university asking it to publicly disavow the report.

“My position is that Penn State has done a great disservice to the state here in Pennsylvania by allowing the gas industry essentially to have its way with this research paper,” said Jon Bogle, director of the alliance. “It’s essentially a propaganda piece that they paid these researchers to do, and it has now been used as an authority piece when it actually isn’t.”

Last October, the Pennsylvania Budget and Policy Center issued its own report claiming the Penn State professors’ study contained inflated job and tax-revenue numbers.

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Easterling said he has asked for the study to be referred to as the “Marcellus Shale Committee report” and dismissed the “Penn State report,” as it had been called, as “simply incorrect usage.” The researchers, however, are still “entitled to list their affiliation.”

Timothy Considine, a co-author of the report who is now a University of Wyoming professor, stood by the research and projections, but said he was unaware of Penn State’s policy of posting a funding disclaimer.

“(The Marcellus Shale Coalition) came to us … and asked us what the economic impacts were,” he said. “They had no idea. So our analysis in no way could be swayed by the natural gas industry because they have no idea about the economic impact.”

Easterling was also critical of some of the policy recommendations included in the report. In his letter, he said the researchers “may well have crossed the line between policy analysis and policy advocacy.”

The dean specifically took issue with the report’s stance against a severance tax against gas companies, which they said would be harmful and unnecessary. The researchers should have been “more scholarly and less advocacy-minded,” he wrote.

People have zeroed in on their policy recommendations without taking the report as a whole, Considine said.

“I think people have blown it way out of proportion when we touch upon severance tax, and that’s really unfortunate,” he said.

The report also said hydraulic fracturing, which blasts a mixture of water, chemicals and sand deep underground to break up rock structures and make natural gas more accessible, should not be regulated under the federal Safe Drinking Water Act, calling it an “ominous proposal to the development of the Marcellus Shale.”

The report was highly touted and referred to by landowners and advocates eager to drill in the gas-rich formation. Dan Fitzsimmons, president of the Joint Landowners Coalition of New York, said just because the industry paid for the report doesn’t mean the findings are incorrect.

“They have to go to (the gas companies) to find out how many people they are hiring and how much money they are spending,” Fitzsimmons said. “Now, if (the industry) wrote the study, I’d say that probably wouldn’t be right.”